Australia — Stephen Smith on Air Warfare Destroyers and Submarines

Min­is­ter for Defence — Inter­view with Kier­an Gilbert, SKY NewsTOPICS: Car­bon price; ADFA and ADF inves­ti­ga­tions; Air War­fare Destroy­ers and Sub­marines; Sen­ate Esti­mates – fly­ing troops to Mid­dle East. KIERANGILBERT: Min­is­ter, thanks very much for your time. STEPHENSMITH: Plea­sure. KIERANGILBERT: Before we get onto a num­ber of issues in your port­fo­lio specif­i­cal­ly, I want to get your reac­tion to the lat­est in the car­bon tax debate. Cate Blanchett appeared in this adver­tise­ment again last night, this open let­ter signed today by a num­ber of Aus­tralians, a num­ber of actors, Rebec­ca Gib­ney among them. What do you make of the crit­i­cism against Cate Blanchett that she is wealthy and famous and not nec­es­sar­i­ly going to under­stand the chal­lenge — cost of liv­ing chal­lenges that face many ordi­nary Aus­tralians, par­tic­u­lar­ly in the face of what’s going to be an impost through the car­bon tax?

STEPHENSMITH: Well a few points. First­ly, the Gov­ern­ment is very strong­ly of the view that we have to reduce the amount of car­bon in our econ­o­my and in our atmos­phere to make a con­tri­bu­tion to min­imis­ing and reduc­ing dan­ger­ous cli­mate change so it’s square­ly in that con­text.

Sec­ond­ly, when indi­vid­ual Aus­tralians or indi­vid­ual Aus­tralian groups make a pub­lic pol­i­cy point, that’s a good thing and that means they’re com­mit­ted to a par­tic­u­lar view but it also means they are very con­scious of draw­ing to atten­tion a sig­nif­i­cant chal­lenge fac­ing Aus­tralia and that’s the case in this respect.

We under­stand that very many Aus­tralians are con­scious of the threat or the pos­si­bil­i­ty of addi­tion­al impost in the econ­o­my as a result of an emis­sions trad­ing or a car­bon tax pro­pos­al. And that’s why we’ve made it very clear that the arrange­ment we want to put in place is a tax on big pol­luters and that adverse con­se­quences so far as indus­try and house­holds are con­cerned will be the sub­ject of com­pen­sa­tion. So, it’s a good thing that peo­ple are out there draw­ing atten­tion to a very con­sid­er­able and sig­nif­i­cant eco­nom­ic and envi­ron­men­tal chal­lenge that we face.

On the oth­er hand our polit­i­cal oppo­nents are essen­tial­ly deniers of the fact that there’s too much car­bon in the atmos­phere, too much car­bon in our econ­o­my and if they’re elect­ed to office effec­tive­ly would do noth­ing.

KIERANGILBERT: What does it say about the Government’s abil­i­ty to sell this though if you’re rely­ing on movie stars to do it for you?

STEPHENSMITH: Well we’re not so much rely­ing upon movie stars, as I say it’s entire­ly a mat­ter for indi­vid­u­als con­cerned and groups con­cerned to put these points of view. We put our point of view very strong­ly. Our point of view stands in stark con­trast to the Lib­er­al and Nation­al par­ties. We believe there is too much car­bon in our econ­o­my and too much car­bon in the atmos­phere. We need to reduce that.

The effec­tive way of doing that is the way in which we are pro­ceed­ing, that will see a tax on big pol­luters and a pro­gram where­by house­holds or indus­try will be sen­si­bly com­pen­sat­ed for a change in our econ­o­my and as a result a reduc­tion of car­bon in the atmos­phere.

KIERANGILBERT: Okay lots — lots to talk about in Defence specif­i­cal­ly. The Skype sex scan­dal, alle­ga­tions that teenage cadets have been deprived of sleep and detained for I think it was 17 hours as part of the inves­ti­ga­tion here and also alle­ga­tions that an ADF Lieu­tenant was man­han­dled dur­ing this probe by ADFA and this was in front of some top Defence brass. Now tell me what do you know of these alle­ga­tions? Is there any truth to any of this?

STEPHENSMITH: Well first­ly so far as the alle­ga­tions of sleep depri­va­tion are con­cerned. They’re very seri­ous alle­ga­tions, very con­cern­ing of course and that is now the sub­ject of a Defence enquiry. The Defence Force Inves­tiga­tive Ser­vice is now inves­ti­gat­ing that.

When these alle­ga­tions were drawn to the atten­tion of Defence, Defence enquired of Mr Kirkham QC as to whether it would appro­pri­ate for him to con­sid­er them as part of the enquiry into the so-called Skype affair. His advice that it would not be, as a con­se­quence ADFIS, the Inves­tiga­tive Ser­vice is cur­rent­ly look­ing at these issues.

So as far as the sug­ges­tion of an assault is con­cerned, that is also the sub­ject of inves­ti­ga­tion. The advice I have is that the two offi­cers, the two senior offi­cers of whom it is assert­ed wit­nessed this alle­ga­tion, they both say that no such thing occurred in their pres­ence. But there are a range of seri­ous issues that we see drawn to pub­lic atten­tion this morn­ing. They are two of them. There is also a sug­ges­tion that young cadets were refused or advised not to see legal advice. That’s also the sub­ject of an enquiry. We need to take these mat­ters seri­ous­ly which we are and they are being inves­ti­gat­ed as we speak.

KIERANGILBERT: How con­cerned are you by that? First of all there was the inci­dent itself, the alleged inci­dent and then it seems in every step of the way there has been a prob­lem or a bungling by Defence?

STEPHENSMITH: Well I wouldn’t use that phrase. I mean we do need to progress these mat­ters method­i­cal­ly. The Skype issue itself was a high­ly con­tro­ver­sial issue. We put in place not just Mr Kirkham’s enquiry but a range of oth­er more gen­er­al­ly — more gen­er­al broad based enquiries to address it.

Just on Mr Kirkham’s enquiry I think it’s impor­tant to make this point; as a result of the var­i­ous enquiries that he — var­i­ous inter­views that he has con­duct­ed, Mr Kirkham came to the view that he should speak to the Vice Chief of the Defence Force, in oth­er words inter­view the Vice Chief of the Defence Force.

The Vice Chief of the Defence Force of course was the ini­ti­at­ing offi­cer, so as a con­se­quence of the need to avoid any per­cep­tion of a con­flict of inter­est, the Vice Chief of the Defence Force will essen­tial­ly stand aside as the ini­ti­at­ing office of the enquiry and that role will now be tak­en by the Chief of the Air Force and he is cur­rent­ly the Chief of Air Force in dis­cus­sions with Mr Kirkham as to the tech­ni­cal way of effect­ing that.

But Mr Kirkham’s effect­ing a full and com­plete enquiry, that’s a good thing but these oth­er mat­ters will also be the sub­ject of a seri­ous sep­a­rate inves­ti­ga­tion.

KIERANGILBERT: But on anoth­er issue now, the $8 bil­lion Air War­fare Destroy­er project, report­ed­ly paral­ysed at the moment because of in-fight­ing between the Sub­ma­rine Cor­po­ra­tion, the Defence Materiel Organ­i­sa­tion and BAE, as well as reports today 2400 faults appar­ent­ly in the data used to build the hulls of the destroy­ers. This has got to be a mas­sive con­cern to you and as I say it’s not the first report. This is — there have been sev­er­al reports in The Aus­tralian news­pa­per about sys­tem­at­ic prob­lems here and as I say the sit­u­a­tion is — the project is paral­ysed.

STEPHENSMITH: Well again, I don’t use that descrip­tion. It’s a very big project. The project has seen some ini­tial dif­fi­cul­ties and the Min­is­ter for Defence Materiel Jason Clare and I have been work­ing through with Defence, with the Defence Materiel Organ­i­sa­tion and also with the indus­try play­ers on these issues for a num­ber of months and late last week I announced that as a con­se­quence of all of the par­ties to the project agree­ing, there would be a real­lo­ca­tion of the con­struc­tion of a range of blocks. The Air War­fare Destroy­ers are cur­rent­ly being con­struct­ed block by block in New­cas­tle, in Mel­bourne, and in Ade­laide, ulti­mate­ly to be assem­bled in Ade­laide and as a result of the pres­sure which is on BAE in Mel­bourne because they’re involved in two big projects; the Air War­fare Destroy­er and also the Land­ing Heli­copter Docks, it’s been agreed that there will be a real­lo­ca­tion of the build­ing of blocks to New­cas­tle and also to Ade­laide and there will also be five blocks which will now be built in Spain.

KIERANGILBERT: But more than 2000 faults in the data to build the hulls. Is this the sort of-

STEPHENSMITH: Well we’re very — we’re very-

KIERANGILBERT: -num­ber you’re talk­ing about here?

STEPHENSMITH: We need to very clear­ly under­stand this is a big and a com­plex project. The advice I have is that at any giv­en time in the build­ing of the blocks and the build­ing of this project, there can be some­thing in the order of 50,000 to 51,000 par­tic­u­lar sched­uled items. So these aren’t described to me as errors or faults; they are queries which come in the very ear­ly stage of the build­ing; tech­ni­cal queries, design queries and the like.

KIERANGILBERT: So you’ve been reas­sured by the mil­i­tary that these things are on track; you still have con­fi­dence in the way this is unfold­ing?

STEPHENSMITH: Well, the mea­sures that I announced last week togeth­er with Jason Clare, in our view, will see what we were very fear­ful, a two-year delay in this project reduced to 12 months. BAE have been under con­sid­er­able pres­sure because they’ve been deal­ing with two big projects; so the real­lo­ca­tion of blocks in our view will sub­stan­tial­ly assist in the pro­gress­ing of this big project-

KIERANGILBERT: So do you have con­fi­dence in the way this is being han­dled? Is — are you — still have con­fi­dence that the AWD, that this $8 bil­lion project is still on track?

STEPHENSMITH: Well, we have con­fi­dence that it is on track, but we also under­stand it’s a con­sid­er­able project and there have been dif­fi­cul­ties. I went, for exam­ple, in March of this year when I was in Lon­don, I went to BAE head­quar­ters in the Unit­ed King­dom and very strong­ly made the point that we were wor­ried about this project and we need­ed — not just the Gov­ern­ment but also the indus­try play­ers — we need­ed to work togeth­er to address the dif­fi­cul­ties; And you’ve seen the announce­ment that I made last week with the real­lo­ca­tion of work to New­cas­tle and to Ade­laide and also to Spain.

KIERANGILBERT: Can I ask you two quick issues? I know you’ve got to go, but the sub­ma­rine main­te­nance of the Collins class subs, the cost the — Oppo­si­tion says it’s going to blow out by 36 per cent over the next decade, and that you have not tak­en or advanced a main­te­nance — a sug­gest­ed main­te­nance con­tract as sug­gest­ed by the Audi­tor-Gen­er­al two years ago. You’ve done noth­ing with that.

STEPHENSMITH: Well, three points. First­ly, the Collins class sub­ma­rine pro­gram — its main­te­nance, its sus­tain­ment, is very chal­leng­ing. I have said quite frankly and open­ly in the past that this will con­tin­ue to be a very seri­ous chal­lenge, not just for the par­ties con­cerned, but also for Defence and also for the Gov­ern­ment. So this is a very con­sid­er­able chal­lenge; that’s the first point.

Sec­ond­ly, the Audit Office report that’s referred to, about 80 per cent of those rec­om­men­da­tions have been imple­ment­ed and we’re cur­rent­ly work­ing very close­ly, the Defence Materiel Organ­i­sa­tion and the Aus­tralian Sub­ma­rine Cor­po­ra­tion on a new per­for­mance-based con­tract which we hope will lead to improve­ments. But no-one should be under any illu­sions that this is a very chal­leng­ing project for us; and that will also come as no sur­prise to the Aus­tralian pub­lic who have seen suc­ces­sive Gov­ern­ments chal­lenged by the sub­ma­rine project that we have. And, of course, as well as that we are at the ear­ly stages of embark­ing upon a new project, a new pro­gram for 12 new sub­marines which was part of the White Paper 2009.

KIERANGILBERT: And one last ques­tion; a senior offi­cer appar­ent­ly pub­licly iden­ti­fied and con­tact­ed a con­fi­den­tial wit­ness in the Sen­ate Inquiry into a con­tract to fly Aus­tralian troops into the Mid­dle East. This wit­ness was meant to be con­fi­den­tial, as I say. A senior offi­cer not only con­tact­ed the per­son but pub­licly iden­ti­fied the indi­vid­ual con­cerned. What — you’ve got to be wor­ried about that, don’t you?

STEPHENSMITH: Well, this was a most unfor­tu­nate inci­dent and the Sec­re­tary of the Depart­ment of Defence, when it occurred, wrote to the Sen­ate Com­mit­tee, apol­o­gised for it. He also — the Sec­re­tary of the Depart­ment also alert­ed me. It was unfor­tu­nate. It cre­at­ed a very bad per­cep­tion and I’m sure that giv­en we’ve got Sen­ate esti­mates today, the Sec­re­tary of the Depart­ment will be in a posi­tion to offer fur­ther advice to the Com­mit­tee as to the steps he’s tak­en to make sure that such bad per­cep­tions don’t occur again in the future.